Yesterday, SteelOrbis reported that US domestic scrap prices traded down sharply during the January buy cycle. As speculated, soft scrap pricing has placed downward pressure on the US hot rolled coil market. Prices have “officially” ticked down to an average of $35-$36 cwt. ($772-$794/mt or $700-$720/nt), ex-mill, which reflects a $2.00 cwt. ($44/mt or $40/nt) dip in the past week.
“I believe that scrap has been over priced by $100/ton for the past year, and now it’s time to pay the piper,” a source said. “Scrap will likely take the rest of the carbon steel products down with it, and I think we could see HRC below $35 cwt. ($772/mt or $700/nt), but I don’t think it will stay there for long."
At least one SteelOrbis source indicated that they had received an offer from a mill that was below the current range, although it’s largely held that any transactions made at that level are an outlier, and not representative of the market.
A third source noted that lead times are hovering around four weeks, which “isn’t doing the spot market any favors.”
After rising throughout 2018, US domestic HRC prices are getting closer to year-on-year levels. In January 2018, spot prices were in the range of $32.50-$34.50 cwt. ($717-$761/mt or $650-$690/nt), ex-mill.